Prince Rupert Port

The Prince Rupert Port lies on Kaien Island in western British Columbia’s Chatham Sound. Near the mouth of Canada’s Skeena River, it is 1500 kilometers northwest of Vancouver. Prince Rupert Port is an ice-free harbor that serves the coal, lumber, and other mining industries, as well as the surrounding agricultural area. On January 18, 2011, Arch Coal signed a coal-export agreement with the Prince Rupert Port in the same week it reported buying a 38% ownership stake in a coal loading facility planned for Longview, Washington, the Millennium Bulk Logistics Longview Terminal.

Arch Coal signs coal export lease
On January 18, 2011, Arch Coal signed a coal-export agreement with the Prince Rupert Port in the same week it reported buying a 38% ownership stake in a coal loading facility planned for Longview, Washington, the Millennium Bulk Logistics Longview Terminal. Both are for the company to secure shipping access to Asian markets. Arch Coal signed a five-year agreement to export up to two million tons of coal in 2011 from Prince Rupert, B.C., and up to 2.5 million tons of coal a year in 2012 through 2015.

The deal was signed with Ridley Terminals Inc., a port operator owned by the Canadian government with 12 million tons of annual coal-export capacity. International demand for U.S. coal has increased as supplies from Australia - the world's No. 2 thermal-coal exporter after Indonesia - were disrupted by massive floods in 2010 in the country's eastern, coal-producing region.

Ridley also signed smaller coal contracts in 2010 with U.S. coal producers Cloud Peak and Enserco. Together, the three American contracts represent about 40 per cent of capacity at Ridley, according to the Mining Association of British Columbia. Canada coal companies such as Teck Resources, Western Coal, and Grande Cache say the Crown corporation's decision to award long-term contracts to three U.S. companies will clog the already busy port, and jeopardize their plans for coal export expansion.

Expansion agreement with Western Coal
In Feb. 2011, Western Coal signed an amended terminal services agreement with Ridley Terminals Inc. to expand the coal company's production levels at its facilities in Canada. The company exports most of its metallurgical coal to Asia-Pacific markets to meet the growing demand by steel makers. Ridley can load up to 12 million metric tonnes of coal each year - the expansion plans means that could double to 24 million metric tonnes by the year 2015, due also to the five-year agreement with Arch Coal.

Efforts to privatize the coal port
In March 2010, it was reported that a consortium of major B.C. coal and lumber companies and several investors appeared ready to buy the Prince Rupert coal terminal - Ridley Terminals - from the federal government. Ridley Terminals made $25 million in revenue in 2008. B.C. coal firms operating out of the the region include Peace River Coal and Western Coal, both members of Ridley Terminals. By January 2011, however, the port was still a Crown corporation, with the decision to award port capacity to US coal companies like Arch Coal creating tension with Canadian coal companies, who say the move will choke off their coal export capacity.

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